Kasich Tax Cut Favors Wealthy

Gov. John Kasich says he’s cutting
everyone’s taxes in his 2014-2015 budget, but an analysis released Feb. 7
found the plan is actually raising taxes for the poor and middle class.
The Policy Matters Ohio report reveals
the poorest Ohioans will see a tax increase of $63 from Kasich’s budget
plan, while the top 1 percent will see a tax decrease of $10,369.

For the poorest Ohioans, the new tax
burden comes through the sales tax. On average, the bottom 20 percent of
the income ladder will have their income taxes reduced by $8, but the
sales tax plan will actually increase their average sales tax burden by
$71.

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Under the budget proposal, they will get a $157 income tax cut
on average, but their sales tax burden will go up by $165 — meaning
they’ll end up paying $8 more in taxes.

The top 1 percent get the most out of
Kasich’s tax plan. Their income taxes will be reduced by a whopping
$11,150. They do see the highest sales tax increase at $781, but it’s
not enough to make up for the income tax cut.

Kasich says his budget is all about creating jobs, but the regressive plan defies economic research.

Previous analyses from the Congressional
Budget Office and Congressional Research Service, which measure the
budgetary and economic impact of federal policy, found tax cuts for the wealthy are economically unproductive compared to other programs.

Kasich’s plan proposes cutting the state
income tax by 20 percent across the board and lowering the sales tax
from 5.5 percent to 5 percent.

To pay for the cuts, the proposal
broadens the sales tax so it applies to additional services — including
cable TV services and admission to sports events — while keeping
exemptions for education, health care, rent and residential utilities.